Forecast a net loss of 580 million to 860 million yuan in 2021
According to the 2021 performance forecast, the company expects operating income to be 1.802.30 billion yuan, an increase of 157.25% to 228.71% over the same period last year; a net loss of 580,860 million yuan, a decrease of 1.07 billion yuan to 1.35 billion yuan; and an estimated deduction of 590 million yuan to 870 million yuan in non-net loss, 1.07 billion yuan to 1.35 billion yuan lower than the same period last year. The company's performance is lower than our and market expectations, mainly due to: 1) asset impairment loss: 150-250 million yuan in inventory impairment, holding subsidiary Borg B.V. And the goodwill impairment provision of China Film Jiahua Yuefang Cinema is 150.280 million yuan and 15 million ~ 25.36 million yuan respectively; 2) the related credit impairment loss is about 150 million yuan; 3) the financial expenses are about 360 million yuan, which is higher than we expected.
Pay attention to the main points
The sports copyright business has been restored, and the film and television business is relatively stable. In terms of sports business, the company expects the sports sector to achieve an operating gross profit of about 650 million to 85 million yuan in 2021, we judge that it is mainly the European Cup and the Asian qualifiers for the 2022 World Cup that contribute to the company's sports copyright business, while affected by COVID-19 's epidemic situation, the company's sports marketing business and player brokerage business have not yet fully resumed. In terms of film and television business, the company expects the film and television business sector to achieve an operating gross profit of about 30,000,000 yuan for the whole year, but due to the impact of the industry environment, the company's investment in related projects has been reduced.
The impact of the epidemic is still there, and a number of impairment and financial expenses affect annual profits. According to the company announcement, affected by the film and television industry and business promotion, the company will provide for inventory impairment of 150 million to 250 million yuan, and prepare for goodwill impairment of its holding subsidiary, China Film Jiahua Yuefang Cinema, about 150 million to 25.36 million yuan. in terms of sports business, the epidemic has affected the development of player brokerage business, and the transaction volume / amount in the European summer and winter transfer market continues to decline, and the company expects the holding subsidiary Borg B.V. The provision for impairment of goodwill is about 150-280 million yuan; in addition, due to the lower-than-expected recovery, the company expects a credit impairment loss of about 150-260 million yuan. The cost-side financial expenses are still high, and the company expects the financial expenses for 2021 to be about 360-50 million yuan.
AFC rights and interests are expected to promote performance release and focus on the scheduling of key film and television projects. The Asian Football Association World Cup Asian qualifier starts in September 2021 and will last until March 2022. We believe that the recovery of the company's sports copyright business is relatively sound, and the related performance increments of AFC will be gradually released in 2022 and subsequent years. The film and television business focuses on the scheduling of projects. The company said that it is currently coordinating the broadcast schedule of "Happiness to Wanjia" with various platforms, and is expected to achieve its premiere in the first quarter of 2022.
Valuation and suggestion
Taking into account the company's asset / credit impairment loss and financial expenses are still high, we adjust the 2021 Universe 2022 net profit from 91 million yuan / 207 million yuan to-783 million yuan / 175 million yuan, the first new introduction of the 2023 forecast of 163 million yuan. The current share price is 21 times PE in 2022, maintaining a neutral rating and lowering its target price by 6% to 6%, corresponding to 20 times PE in 2022, with potential 6% downside space.
Risk
The non-public process was lower than expected, the epidemic affected business development, goodwill / inventory impairment risk, the performance of M & A targets was lower than expected, and the progress of film and television projects was slow.